Despite crude oil prices crashing in April , retail petrol prices stayed the same as the Centre’s excise duty component recorded multiple sharp increases . With fuel consumption nearing pre-COVID levels now, the government will earn substantial income to augment its dwindling coffers.
However, the average Indian citizen, along with the average Pakistani citizen, spends 17% of her income on fuel, the highest share in the world. India is among the few countries that increased their fuel price in the last year despite crude prices crashing.
Back in the black
Petrol consumption in India neared pre-COVID levels in September after crashing in April due to movement restrictions. Graph shows consumption in thousand metric tonnes.
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Fall and rise
The price of crude oil in October is 42% lower than what it was at the start of FY21, while the price of petrol increased by 12% in the same period.
The graph plots the average petrol price in April-June 2020 in 59 countries against the change in petrol price compared to the same period in 2019. Petrol prices increased in this period in only eight countries. It increased by over 10% only in India and Egypt.
An average Indian, similar to a Pakistani national, spends* 17% of her day’s income on fuel. No other citizen in the rest of the 57 economies analysed spends more than 10% of her daily income on fuel.
Source: globalpetrolprices.com, *based on IMF’s 2019 GDP per capita figures, PPAC, Bloomberg